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Integer Alerts

Sulphuric Acid Market in 2017 – a concise review

Posted On: 26-01-2018 By: Ali Asaadi

By Oliver Hatfield – Director of Fertilizers and Chemicals

Sulphuric acid prices were generally higher in the last two months of 2017 as the balance between supply and demand in most markets was either closely matched or tight. According to the last quarterly analysis in Integer’s Sulphuric Acid Market Service, most of the countries that had released data for the year to date period to November 2017, recorded higher acid imports compared to the same period in 2016, while many significant exporting countries saw volumes contract. Exports from two of the leading countries, Japan and Korea, have been depressed by planned outages at metallurgical acid plants.

Meanwhile, the dramatic fly-up in sulphur prices also supported sulphuric acid prices, indirectly. For example, OCP, Africa’s biggest maker and buyer of sulphuric acid, faced a predicament after a key Russian sulphur supplier declared force majeure on Q4 volumes as harsh weather conditions prevented sulphur getting to export port. OCP turned not only to other sulphur sources but also to the sulphuric acid market. Having already seen import volumes for the year to date period to October 2017 reach 1.2 million tonnes, about 5% ahead of the prior year period, OCP was reported to have booked shipments of approaching 190,000 tonnes of sulphuric acid for December 2017, compared to 108,000 tonnes in 2016.

Views on whether the recent persistent tightness would fizzle out or not added spice to annual and Q1 2018 contract discussions and agreements which generally resulted in significant increases over earlier period numbers. However, using the last quarter of 2017 as guidance for market direction in 2018 may be misleading. Acid supply volumes were lower than they would otherwise be in some key export locations like Japan due to planned downtime, while unplanned production outages in the US and Philippines also contributed to supply losses. If supply volumes normalise looking forward, price inflation pressure should ease.

We are seeing some potentially important fundamental changes to the sulphuric acid market. Increasing optimism about global economic growth is translating to rising metals prices. That in turn is leading to higher operating rates at metals processors, which normally brings increased acid by-production. Some players are also discussing new projects, though this is not yet converting to many firm commitments.

On the acid buyer side, increased economic growth is also supporting increased requirements for acid in the multitude of end-use processes. More dynamic movements on the supply and demand side generally lead to increased price volatility, the scourge of most business activity.

Integer track sulphuric acid supply, demand, import and export developments worldwide in our Sulphuric Acid Market Service, providing subscribers to this service with the necessary information to mitigate or benefit from this volatility.

For more information on Integer’s sulphuric acid market intelligence services, and how our analysis, forecasts and supporting data can support your decision making, please check the links below.

If you have any questions about this article or our services, please contact us using the details below